Welcome!

@CloudExpo Authors: Dana Gardner, Pat Romanski, Elizabeth White, Liz McMillan, William Schmarzo

News Feed Item

Brocade Reports Fourth Quarter and Fiscal 2012 Earnings

Achieved Record Fourth Quarter and Full Year Results

SAN JOSE, CA -- (Marketwire) -- 11/19/12 -- Brocade® (NASDAQ: BRCD) today reported financial results for its fourth quarter and full fiscal year 2012 ended October 27, 2012. Brocade reported record fourth quarter revenue of $578 million, representing an increase of 5% year-over-year and 4% quarter-over-quarter. Revenue for fiscal year 2012 was $2,238 million, a record for the company, up 4% year-over-year. The resulting GAAP diluted earnings per share (EPS) was $0.11 for Q4 and $0.41 for fiscal 2012, on record annual net income of $195 million. Non-GAAP diluted EPS was $0.17 for Q4, the fifth consecutive quarter of year-over-year EPS growth, and $0.66 for the year.

"Q4 was an excellent quarter for Brocade and a strong ending for fiscal year 2012 during which we established a number of company records including revenue, net income, and operating cash flow," said Michael Klayko, CEO of Brocade. "Our product portfolio across all areas of our business is the strongest it has ever been and we are driving industry transformation in emerging areas of growth including virtualized data centers, cloud computing, and software-defined networking. We believe Brocade is well-positioned for continued growth in fiscal 2013."

Summary of Q4 and fiscal 2012 results:

  • Q4 2012 Storage Area Networking (SAN) business revenue, including products and services, was $394 million, up 9% year-over-year and 4% quarter-over-quarter. SAN product revenue increased 12% year-over-year and 5% quarter-over-quarter, in a seasonally strong quarter for the Company. Brocade's 16 Gbps Fibre Channel products represented nearly 35% of director and switch revenue in the quarter. Fiscal 2012 SAN business revenue was $1,578 million, up 7% year-over-year.

  • Q4 2012 IP Networking business revenue, including products and services, was $184 million, down 3% year-over-year and up 4% quarter-over-quarter. Ethernet switch revenue was up 5% year-over-year and 1% quarter-over-quarter, while routing revenue was down 10% year-over-year and up 9% quarter-over-quarter. From a customer standpoint, Federal and Service Provider revenues were both up sequentially, while Enterprise revenue was lower. Fiscal 2012 IP Networking business revenue was $659 million, down slightly year-over-year.

  • Q4 2012 GAAP gross margin was 62.4% and non-GAAP gross margin was 64.8%, compared with 59.5% and 62.9% in Q4 2011, respectively. The year-over-year improvement in gross margin was due to higher revenue, favorable product mix, and lower fixed costs. Fiscal 2012 GAAP and non-GAAP gross margin improved to 61.8% and 64.5%, respectively, compared with 59.8% and 62.5% in fiscal 2011, due to higher revenue and favorable product mix.

  • GAAP operating margin was 14.9% and non-GAAP operating margin was 22.5% in Q4 2012, compared with 9.9% and 21.0% in Q4 2011, respectively. Operating margin expanded both year-over-year and quarter-over-quarter on higher revenue and improved gross margin. Fiscal 2012 GAAP operating margin was 12.4% and non-GAAP operating margin was 20.5%, compared with 8.3% and 17.6% in fiscal 2011, respectively. The improvement in operating margin for the full year was a result of higher gross margin and lower operating expenses as a percentage of revenue.

  • Fiscal 2012 GAAP EPS of $0.41 was up 310% year-over-year on net income of $195 million, up more than 280% year-over-year. Fiscal 2012 non-GAAP EPS of $0.66 was up 33% year-over-year on non-GAAP net income of $311 million, up 26% year-over-year.

  • Average diluted shares outstanding for Q4 2012 were lower by 11.7 million from Q4 2011, principally from share repurchases during the past year, including 11.2 million shares ($60 million) repurchased during Q4 2012.

  • Operating cash flow was $210 million in Q4 2012 and $591 million in fiscal 2012, both records. During the quarter, the Company paid the remaining $30 million of its term loan and ended the year with a cash balance of $713 million and cash, net of debt, of $108 million.

Brocade management will host a conference call today at 2:30 p.m. PT (5:30 p.m. ET) to discuss fiscal fourth quarter and full year results, as well as a fiscal first quarter 2013 outlook. To access the webcast please go to www.brcd.com/events.cfm. A replay of the conference call and the prepared comments and slides will be available at www.brcd.com.

Other Q4 2012 product, customer, and partner announcements are available at http://newsroom.brocade.com/.

Financial Highlights and Additional Financial Information


                                             Q4 2012    Q3 2012    Q4 2011
                                            ---------  ---------  ---------
Revenue                                     $    578M  $    555M  $    550M
GAAP net income (loss)                      $     54M  $     43M  $     (4M)
Non-GAAP net income                         $     78M  $     67M  $     79M
GAAP net income (loss) per share -- diluted $    0.11  $    0.09  $   (0.01)
Non-GAAP EPS -- diluted                     $    0.17  $    0.14  $    0.16
GAAP gross margin                                62.4%      61.3%      59.5%
Non-GAAP gross margin                            64.8%      63.7%      62.9%
GAAP operating income                       $     86M  $     70M  $     55M
Non-GAAP operating income                   $    130M  $    108M  $    116M
GAAP operating margin                            14.9%      12.6%       9.9%
Non-GAAP operating margin                        22.5%      19.5%      21.0%
Adjusted EBITDA (1)                         $    153M  $    131M  $    138M
Cash provided by operations                 $    210M  $    113M  $    206M

  • Q4 2012 effective GAAP tax rate was 25.1% and effective non-GAAP tax rate was 32.4%.
  • Q4 2012 total SAN port shipments were approximately 1.13 million.

Please see important note of explanation on Non-GAAP measures below, including a detailed reconciliation between GAAP and Non-GAAP information in the tables included herein.


                                             Q4 2012    Q3 2012    Q4 2011
                                            ---------  ---------  ---------
As a % of total revenues
OEM revenues                                       65%        67%        62%
Channel/Direct revenues                            35%        33%        38%
10% or greater customer revenues                   46%        55%        41%
Domestic revenues                                  63%        64%        62%
International revenues                             37%        36%        38%
SAN product revenues                               59%        58%        55%
IP Networking product revenues                     26%        26%        29%
Global Services revenue                            15%        16%        16%
SAN business revenues (2)                          68%        68%        66%
IP Networking business revenues (2)                32%        32%        34%
Estimates as a % of IP Networking business
 revenues:
  Enterprise, excluding Federal                    45%        52%        57%
  Federal                                          24%        19%        18%
  Service Provider                                 31%        29%        25%


                                             Q4 2012    Q3 2012    Q4 2011
                                            ---------  ---------  ---------
Cash, cash equivalents and short-term
 investments                                $    713M  $    581M  $    415M
Deferred revenues                           $    293M  $    280M  $    270M
Capital expenditures                        $     17M  $     18M  $     20M
Total debt, net of discount                 $    601M  $    630M  $    789M
Days sales outstanding                        37 days    38 days    41 days
Employees at end of period                      4,536      4,597      4,546

(1) Adjusted EBITDA is as defined in the Term Debt Credit Agreement.
(2) SAN and IP Networking business revenues include product and global services revenues.

Non-GAAP Financial Measures

This press release contains non-GAAP financial measures. In evaluating Brocade's performance, management uses certain non-GAAP financial measures to supplement consolidated financial statements prepared under GAAP.

Management believes that non-GAAP financial measures used in this press release allow management to gain a better understanding of Brocade's comparative operating performance both from period to period, and to its competitors' operating results. Management also believes these non-GAAP financial measures help indicate Brocade's baseline performance before gains, losses or charges that are considered by management to be outside ongoing operating results. Accordingly, management uses these non-GAAP financial measures for planning and forecasting of future periods and in making decisions regarding operations performance and the allocation of resources. Management believes these non-GAAP financial measures, when read in conjunction with Brocade's GAAP financials, provide useful information to investors by offering:

  • the ability to make more meaningful period-to-period comparisons of Brocade's ongoing operating results;

  • the ability to make more meaningful comparisons of Brocade's operating performance against industry and competitor companies;

  • the ability to better identify trends in Brocade's underlying business and to perform related trend analysis;

  • a better understanding of how management plans and measures Brocade's underlying business; and

  • an easier way to compare Brocade's most recent results of operations against investor and analyst financial models.

Management excludes certain gains or losses and benefits or costs in determining non-GAAP net income that are the result of infrequent events or arise outside the ordinary course of Brocade's continuing operations. Management believes that it is appropriate to evaluate Brocade's operating performance by excluding those items that are not indicative of ongoing operating results or limit comparability. Such items include: (i) provision or benefit from certain pre-acquisition litigation (ii) legal fees associated with certain pre-acquisition litigation, (iii) legal fees associated with indemnification obligations and other related costs, net, (iv) acquisition and integration costs, (v) loss on sale of property, (vi) interest expense related to the adoption of new standards relating to convertible debt instruments, (vii) original issue discount and debt issuance costs of debt related to lenders that did not participate in refinancing, and (viii) loss on sale of a subsidiary.

Management also excludes the following non-cash charges in determining non-GAAP net income (i) stock-based compensation expense and (ii) amortization of purchased intangible assets. Because of varying available valuation methodologies, subjective assumptions and the variety of award types, management believes that the exclusion of stock-based compensation allows for more accurate comparisons of our operating results to our peer companies. Management believes that the expense associated with the amortization of acquisition-related intangible assets is appropriate to be excluded because a significant portion of the purchase price for acquisitions may be allocated to intangible assets that have short lives and exclusion of the amortization expense allows comparisons of operating results that are consistent over time for Brocade's newly acquired and long-held businesses.

Finally, management believes that it is appropriate to exclude the tax effects of the items noted above in order to present a more meaningful measure of non-GAAP net income.

Limitations These non-GAAP financial measures have limitations, however, because they do not include all items of income and expense that impact the Company. Management compensates for these limitations by also considering Brocade's GAAP results. The non-GAAP financial measures that Brocade uses are not prepared in accordance with, and should not be considered an alternative to measurements required by GAAP, such as operating income, net income and net income per share, and should not be considered measurements of Brocade's liquidity. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measures. In addition, these non-GAAP financial measures may not be comparable to similar measurements reported by other companies.

Cautionary Statement

This press release contains statements that are forward-looking in nature, including statements regarding Brocade's future financial performance. These statements are based on current expectations on the date of this press release and involve a number of risks and uncertainties which may cause actual results to differ significantly from such estimates. The risks include, but are not limited to, changes in IT spending levels in one or more of our target markets, including the government sector, Brocade's ability to capitalize on new Brocade sales and marketing initiatives, including expanded go-to-market activities in our IP Networking business, customer acceptance of Brocade's Ethernet fabric solutions, Brocade's ability to continue to successfully innovate new products and services on a timely basis and achieve widespread market acceptance, and the effect of increasing market competition and changes in the industry. Certain of these and other risks are set forth in more detail in our Form 10-Q for the fiscal quarter ended July 28, 2012 and in "Item 1A. Risk Factors" in Brocade's Annual Report on Form 10-K for the fiscal year ended October 29, 2011. Brocade does not assume any obligation to update or revise any such forward-looking statements, whether as the result of new developments or otherwise.

About Brocade

Brocade (NASDAQ: BRCD) is the pure-play networking company that innovates to make high-performance networks easier to deploy, manage, and scale in the most demanding environments.

ADX, Brocade, Brocade Assurance, Brocade One, the B-wing symbol, DCX, Fabric OS, ICX, MLX, MyBrocade, SAN Health, VCS, and VDX are registered trademarks, and AnyIO, HyperEdge, NET Health, OpenScript, and The Effortless Network are trademarks of Brocade Communications Systems, Inc., in the United States and/or in other countries. Other brands, products, or service names mentioned may be trademarks of their respective owners.

© 2012 Brocade Communications Systems, Inc. All Rights Reserved.


                    BROCADE COMMUNICATIONS SYSTEMS, INC.
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                                (Unaudited)

                            Three Months Ended        For the Year Ended
                         ------------------------  ------------------------
                         October 27,  October 29,  October 27,  October 29,
                             2012         2011         2012         2011
                         -----------  -----------  -----------  -----------
                              (In thousands, except per share amounts)
Net revenues
  Product                $   491,169  $   460,993  $ 1,890,856  $ 1,789,814
  Service                     87,188       89,479      346,914      357,628
                         -----------  -----------  -----------  -----------
    Total net revenues       578,357      550,472    2,237,770    2,147,442
                         -----------  -----------  -----------  -----------
Cost of revenues
  Product                    176,635      179,184      689,856      677,196
  Service                     41,032       43,773      164,895      186,712
                         -----------  -----------  -----------  -----------
    Total cost of
     revenues                217,667      222,957      854,751      863,908
                         -----------  -----------  -----------  -----------
Gross margin                 360,690      327,515    1,383,019    1,283,534
Operating expenses:
  Research and
   development                90,310       83,733      363,090      354,401
  Sales and marketing        150,581      145,523      608,502      608,513
  General and
   administrative             18,831       16,330       74,583       69,506
  Amortization of
   intangible assets          14,737       14,476       59,204       60,713
  Restructuring,
   integration and
   indemnification costs
   (recoveries)                  (89)          --          (89)         125
  Loss on sale of
   subsidiary                     --       12,756           --       12,756
                         -----------  -----------  -----------  -----------
    Total operating
     expenses                274,370      272,818    1,105,290    1,106,014
                         -----------  -----------  -----------  -----------
Income from operations        86,320       54,697      277,729      177,520
Interest expense             (14,684)     (13,481)     (52,488)     (97,838)
Interest and other
 income (expense), net           531          (81)        (814)        (378)
Gain (loss) on sale of
 investments and
 property, net                   (26)         (13)         (26)         124
                         -----------  -----------  -----------  -----------
Income before income tax      72,141       41,122      224,401       79,428
Income tax expense            18,140       45,446       29,220       28,818
                         -----------  -----------  -----------  -----------
Net income (loss)        $    54,001  $    (4,324) $   195,181  $    50,610
                         ===========  ===========  ===========  ===========
Net income (loss) per
 share -- basic          $      0.12  $     (0.01) $      0.43  $      0.11
                         ===========  ===========  ===========  ===========
Net income (loss) per
 share -- diluted        $      0.11  $     (0.01) $      0.41  $      0.10
                         ===========  ===========  ===========  ===========
Shares used in per share
 calculation -- basic        459,333      474,975      456,629      474,259
                         ===========  ===========  ===========  ===========
Shares used in per share
 calculation -- diluted      474,213      474,975      472,343      497,030
                         ===========  ===========  ===========  ===========


                    BROCADE COMMUNICATIONS SYSTEMS, INC.
                        CONSOLIDATED BALANCE SHEETS
                                (Unaudited)

                                                   October 27,  October 29,
                                                       2012         2011
                                                   -----------  -----------
                                                     (In thousands, except
                                                          par value)
Assets
Current assets:
  Cash and cash equivalents                        $   713,226  $   414,202
  Short-term investments                                    --          774
                                                   -----------  -----------
    Total cash, cash equivalents and short-term
     investments                                       713,226      414,976
  Accounts receivable, net of allowances for
   doubtful accounts of $827 and $1,388 at October
   27, 2012 and October 29, 2011, respectively         233,139      249,141
  Inventories                                           68,179       74,172
  Deferred tax assets                                   91,539       53,604
  Prepaid expenses and other current assets             49,496       52,308
                                                   -----------  -----------
    Total current assets                             1,155,579      844,201
Property and equipment, net                            518,940      532,384
Goodwill                                             1,624,089    1,630,967
Intangible assets, net                                 109,265      214,697
Non-current deferred tax assets                        136,175      210,028
Other assets                                            37,213       42,031
                                                   -----------  -----------
    Total assets                                   $ 3,581,261  $ 3,474,308
                                                   ===========  ===========
Liabilities and Stockholders' Equity
Current liabilities:
  Accounts payable                                 $   117,350  $   109,471
  Accrued employee compensation                        182,597      118,298
  Deferred revenue                                     216,283      201,421
  Current liabilities associated with facilities
   lease losses                                            976        1,456
  Current portion of long-term debt                      1,977       40,539
  Other accrued liabilities                             91,285       94,802
                                                   -----------  -----------
    Total current liabilities                          610,468      565,987
Long-term debt, net of current portion                 599,203      748,904
Non-current liabilities associated with facilities
 lease losses                                            1,606        2,496
Non-current deferred revenue                            76,907       69,024
Non-current income tax liability                        47,370       63,593
Other non-current liabilities                            9,887       10,166
                                                   -----------  -----------
    Total liabilities                                1,345,441    1,460,170
                                                   -----------  -----------
Commitments and contingencies
Stockholders' equity:
  Preferred stock, $0.001 par value, 5,000 shares
   authorized, no shares issued and outstanding             --           --
  Common stock, $0.001 par value, 800,000 shares
   authorized: Issued and outstanding: 456,913 and
   448,022 shares at October 27, 2012 and October
   29, 2011, respectively                                  457          448
  Additional paid-in capital                         2,009,190    1,984,830
  Accumulated other comprehensive loss                  (9,864)     (11,996)
  Retained earnings                                    236,037       40,856
                                                   -----------  -----------
    Total stockholders' equity                       2,235,820    2,014,138
                                                   -----------  -----------
    Total liabilities and stockholders' equity     $ 3,581,261  $ 3,474,308
                                                   ===========  ===========


                    BROCADE COMMUNICATIONS SYSTEMS, INC.
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (Unaudited)

                                                      Three Months Ended
                                                   ------------------------
                                                   October 27,  October 29,
                                                       2012         2011
                                                   -----------  -----------
                                                        (In thousands)
Cash flows from operating activities:
  Net income (loss)                                $    54,001  $    (4,324)
  Adjustments to reconcile net income (loss) to
   net cash provided by operating activities:
    Excess tax benefits from stock-based
     compensation                                       (3,803)        (393)
    Depreciation and amortization                       47,535       50,899
    Loss on disposal of property and equipment             479          279
    Loss on sale of subsidiary                              --       12,756
    Amortization of debt issuance costs and
     original issue discount                             4,021        1,259
    Net (gains) losses on investments                     (144)           8
    Provision for doubtful accounts receivable and
     sales allowances                                    1,768        1,286
    Non-cash compensation expense                       18,423       19,671
  Changes in assets and liabilities:
    Accounts receivable                                 (3,753)      39,759
    Inventories                                          6,755        4,258
    Prepaid expenses and other assets                    1,312        2,381
    Deferred tax assets                                  1,075       (2,181)
    Accounts payable                                      (756)      (7,043)
    Accrued employee compensation                       42,125       22,400
    Deferred revenue                                    13,367        6,280
    Other accrued liabilities                           28,315       59,755
    Liabilities associated with facilities lease
     losses                                               (228)        (817)
                                                   -----------  -----------
      Net cash provided by operating activities        210,492      206,233
                                                   -----------  -----------
Cash flows from investing activities:
  Proceeds from maturities and sale of short-term
   investments                                             952           --
  Purchases of property and equipment                  (16,792)     (20,136)
  Proceeds from sale of subsidiary                          --        3,905
                                                   -----------  -----------
      Net cash used in investing activities            (15,840)     (16,231)
                                                   -----------  -----------
Cash flows from financing activities:
  Payment of principal related to the term loan        (30,000)     (50,001)
  Payment of fees related to the term loan                  --          (77)
  Proceeds from term loan                                   --            1
  Payment of principal related to capital leases          (477)        (450)
  Common stock repurchases                             (60,056)    (200,654)
  Proceeds from issuance of common stock                22,319        3,819
  Excess tax benefits from stock-based
   compensation                                          3,803          393
                                                   -----------  -----------
      Net cash used in financing activities            (64,411)    (246,969)
                                                   -----------  -----------
Effect of exchange rate fluctuations on cash and
 cash equivalents                                        2,359       (1,390)
                                                   -----------  -----------
Net increase (decrease) in cash and cash
 equivalents                                           132,600      (58,357)
Cash and cash equivalents, beginning of period         580,626      472,559
                                                   -----------  -----------
Cash and cash equivalents, end of period           $   713,226  $   414,202
                                                   ===========  ===========


                    BROCADE COMMUNICATIONS SYSTEMS, INC.
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (Unaudited)

                                                      For the Year Ended
                                                   ------------------------
                                                   October 27,  October 29,
                                                       2012         2011
                                                   -----------  -----------
                                                        (In thousands)
Cash flows from operating activities:
  Net income                                       $   195,181  $    50,610
  Adjustments to reconcile net income to net cash
   provided by operating activities:
    Excess tax benefits from stock-based
     compensation                                       (5,141)        (312)
    Depreciation and amortization                      192,218      206,352
    Loss on disposal of property and equipment             883        2,325
    Loss on sale of subsidiary                              --       12,756
    Amortization of debt issuance costs and
     original issue discount                             7,788       13,183
    Write-off of debt issuance costs and original
     issue discount on debt extinguishment                  --       25,465
    Net gains on investments                              (179)        (340)
    Provision for doubtful accounts receivable and
     sales allowances                                   11,301        9,343
    Non-cash compensation expense                       77,169       83,076
  Changes in assets and liabilities:
    Accounts receivable                                  4,701       53,561
    Inventories                                          4,656        1,327
    Prepaid expenses and other assets                    3,987       (1,688)
    Deferred tax assets                                  1,256       (2,158)
    Accounts payable                                     7,720      (38,917)
    Accrued employee compensation                       47,679          216
    Deferred revenue                                    22,744       19,579
    Other accrued liabilities                           20,277       20,878
    Liabilities associated with facilities lease
     losses                                             (1,370)      (6,024)
                                                   -----------  -----------
      Net cash provided by operating activities        590,870      449,232
                                                   -----------  -----------
Cash flows from investing activities:
  Purchases of short-term investments                       --          (38)
  Proceeds from maturities and sale of short-term
   investments                                             952        1,604
  Purchases of property and equipment                  (72,797)     (96,797)
  Proceeds from sale of subsidiary                          35        3,905
                                                   -----------  -----------
      Net cash used in investing activities            (71,810)     (91,326)
                                                   -----------  -----------
Cash flows from financing activities:
  Payment of principal related to the term loan       (190,000)    (359,898)
  Payment of fees related to the term loan                  --       (1,167)
  Proceeds from term loan                                   --      198,950
  Payment of principal related to capital leases        (1,866)      (1,761)
  Common stock repurchases                            (130,209)    (210,698)
  Proceeds from issuance of common stock                98,791       97,152
  Excess tax benefits from stock-based
   compensation                                          5,141          312
                                                   -----------  -----------
      Net cash used in financing activities           (218,143)    (277,110)
                                                   -----------  -----------
Effect of exchange rate fluctuations on cash and
 cash equivalents                                       (1,893)        (578)
                                                   -----------  -----------
Net increase in cash and cash equivalents              299,024       80,218
Cash and cash equivalents, beginning of year           414,202      333,984
                                                   -----------  -----------
Cash and cash equivalents, end of year             $   713,226  $   414,202
                                                   ===========  ===========


                    BROCADE COMMUNICATIONS SYSTEMS, INC.
            RECONCILIATION BETWEEN GAAP AND NON-GAAP NET INCOME
                                (Unaudited)

                                                      Three Months Ended
                                                   ------------------------
                                                   October 27,  October 29,
                                                       2012         2011
                                                   -----------  -----------
                                                     (In thousands, except
                                                      per share amounts)
Net income (loss) on a GAAP basis                  $    54,001  $    (4,324)
Adjustments:
  Stock-based compensation expense included in
   cost of revenues                                      3,388        4,345
  Amortization of intangible assets expense
   included in cost of revenues                         10,713       14,090
  Legal fees associated with certain pre-
   acquisition litigation                                   --           59
                                                   -----------  -----------
    Total gross margin adjustments                      14,101       18,494
                                                   -----------  -----------
  Legal fees recovery associated with
   indemnification obligations and other related
   costs, net                                              (89)          --
  Stock-based compensation expense included in
   research and development                              4,211        3,984
  Stock-based compensation expense included in
   sales and marketing                                   8,311        8,987
  Stock-based compensation expense included in
   general and administrative                            2,513        2,355
  Amortization of intangible assets expense
   included in operating expenses                       14,737       14,476
  Loss on sale of subsidiary                                --       12,756
                                                   -----------  -----------
    Total operating expense adjustments                 29,683       42,558
                                                   -----------  -----------
      Total operating income adjustments                43,784       61,052
  Income tax effect of adjustments                     (19,443)      22,018
                                                   -----------  -----------
Non-GAAP net income                                $    78,342  $    78,746
                                                   ===========  ===========
Non-GAAP net income per share -- basic             $      0.17  $      0.17
                                                   ===========  ===========
Non-GAAP net income per share -- diluted           $      0.17  $      0.16
                                                   ===========  ===========
Shares used in non-GAAP per share calculation --
 basic                                                 459,333      474,975
                                                   ===========  ===========
Shares used in non-GAAP per share calculation --
 diluted                                               474,213      485,895
                                                   ===========  ===========


                    BROCADE COMMUNICATIONS SYSTEMS, INC.
            RECONCILIATION BETWEEN GAAP AND NON-GAAP NET INCOME
                                (Unaudited)

                                                      For the Year Ended
                                                   ------------------------
                                                   October 27,  October 29,
                                                       2012         2011
                                                   -----------  -----------
                                                     (In thousands, except
                                                      per share amounts)
Net income on a GAAP basis                         $   195,181  $    50,610
Adjustments:
  Stock-based compensation expense included in
   cost of revenues                                     15,433       15,606
  Amortization of intangible assets expense
   included in cost of revenues                         46,229       57,489
  Benefit from certain pre-acquisition litigation           --      (14,335)
  Legal fees (recovery) associated with certain
   pre-acquisition litigation                             (465)         443
                                                   -----------  -----------
    Total gross margin adjustments                      61,197       59,203
                                                   -----------  -----------
  Legal fees (recovery) associated with
   indemnification obligations and other related
   costs, net                                              (89)         125
  Stock-based compensation expense included in
   research and development                             17,952       18,959
  Stock-based compensation expense included in
   sales and marketing                                  33,257       36,068
  Stock-based compensation expense included in
   general and administrative                           10,527       12,442
  Amortization of intangible assets expense
   included in operating expenses                       59,204       60,713
  Loss on sale of subsidiary                                --       12,756
                                                   -----------  -----------
    Total operating expense adjustments                120,851      141,063
                                                   -----------  -----------
      Total operating income adjustments               182,048      200,266
  Debt issuance costs and original issue discount
   of debt related to lenders that did not
   participate in refinancing                               --       25,465
  Income tax effect of adjustments                     (66,458)     (29,886)
                                                   -----------  -----------
Non-GAAP net income                                $   310,771  $   246,455
                                                   ===========  ===========
Non-GAAP net income per share -- basic             $      0.68  $      0.52
                                                   ===========  ===========
Non-GAAP net income per share -- diluted           $      0.66  $      0.50
                                                   ===========  ===========
Shares used in non-GAAP per share calculation --
 basic                                                 456,629      474,259
                                                   ===========  ===========
Shares used in non-GAAP per share calculation --
 diluted                                               472,343      497,030
                                                   ===========  ===========

Add to Digg Bookmark with del.icio.us Add to Newsvine

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

@CloudExpo Stories
With an estimated 50 billion devices connected to the Internet by 2020, several industries will begin to expand their capabilities for retaining end point data at the edge to better utilize the range of data types and sheer volume of M2M data generated by the Internet of Things. In his session at @ThingsExpo, Don DeLoach, CEO and President of Infobright, discussed the infrastructures businesses will need to implement to handle this explosion of data by providing specific use cases for filterin...
Is your aging software platform suffering from technical debt while the market changes and demands new solutions at a faster clip? It’s a bold move, but you might consider walking away from your core platform and starting fresh. ReadyTalk did exactly that. In his General Session at 19th Cloud Expo, Michael Chambliss, Head of Engineering at ReadyTalk, will discuss why and how ReadyTalk diverted from healthy revenue and over a decade of audio conferencing product development to start an innovati...
Early adopters of IoT viewed it mainly as a different term for machine-to-machine connectivity or M2M. This is understandable since a prerequisite for any IoT solution is the ability to collect and aggregate device data, which is most often presented in a dashboard. The problem is that viewing data in a dashboard requires a human to interpret the results and take manual action, which doesn’t scale to the needs of IoT.
SYS-CON Events announced today the Kubernetes and Google Container Engine Workshop, being held November 3, 2016, in conjunction with @DevOpsSummit at 19th Cloud Expo at the Santa Clara Convention Center in Santa Clara, CA. This workshop led by Sebastian Scheele introduces participants to Kubernetes and Google Container Engine (GKE). Through a combination of instructor-led presentations, demonstrations, and hands-on labs, students learn the key concepts and practices for deploying and maintainin...
Cloud analytics is dramatically altering business intelligence. Some businesses will capitalize on these promising new technologies and gain key insights that’ll help them gain competitive advantage. And others won’t. Whether you’re a business leader, an IT manager, or an analyst, we want to help you and the people you need to influence with a free copy of “Cloud Analytics for Dummies,” the essential guide to this explosive new space for business intelligence.
So, you bought into the current machine learning craze and went on to collect millions/billions of records from this promising new data source. Now, what do you do with them? Too often, the abundance of data quickly turns into an abundance of problems. How do you extract that "magic essence" from your data without falling into the common pitfalls? In her session at @ThingsExpo, Natalia Ponomareva, Software Engineer at Google, provided tips on how to be successful in large scale machine learning...
What does it look like when you have access to cloud infrastructure and platform under the same roof? Let’s talk about the different layers of Technology as a Service: who cares, what runs where, and how does it all fit together. In his session at 18th Cloud Expo, Phil Jackson, Lead Technology Evangelist at SoftLayer, an IBM company, spoke about the picture being painted by IBM Cloud and how the tools being crafted can help fill the gaps in your IT infrastructure.
"delaPlex is a software development company. We do team-based outsourcing development," explained Mark Rivers, COO and Co-founder of delaPlex Software, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Traditional IT, great for stable systems of record, is struggling to cope with newer, agile systems of engagement requirements coming straight from the business. In his session at 18th Cloud Expo, William Morrish, General Manager of Product Sales at Interoute, outlined ways of exploiting new architectures to enable both systems and building them to support your existing platforms, with an eye for the future. Technologies such as Docker and the hyper-convergence of computing, networking and sto...
Whether your IoT service is connecting cars, homes, appliances, wearable, cameras or other devices, one question hangs in the balance – how do you actually make money from this service? The ability to turn your IoT service into profit requires the ability to create a monetization strategy that is flexible, scalable and working for you in real-time. It must be a transparent, smoothly implemented strategy that all stakeholders – from customers to the board – will be able to understand and comprehe...
SYS-CON Events announced today that LeaseWeb USA, a cloud Infrastructure-as-a-Service (IaaS) provider, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. LeaseWeb is one of the world's largest hosting brands. The company helps customers define, develop and deploy IT infrastructure tailored to their exact business needs, by combining various kinds cloud solutions.
The cloud market growth today is largely in public clouds. While there is a lot of spend in IT departments in virtualization, these aren’t yet translating into a true “cloud” experience within the enterprise. What is stopping the growth of the “private cloud” market? In his general session at 18th Cloud Expo, Nara Rajagopalan, CEO of Accelerite, explored the challenges in deploying, managing, and getting adoption for a private cloud within an enterprise. What are the key differences between wh...
Using new techniques of information modeling, indexing, and processing, new cloud-based systems can support cloud-based workloads previously not possible for high-throughput insurance, banking, and case-based applications. In his session at 18th Cloud Expo, John Newton, CTO, Founder and Chairman of Alfresco, described how to scale cloud-based content management repositories to store, manage, and retrieve billions of documents and related information with fast and linear scalability. He addres...
Adding public cloud resources to an existing application can be a daunting process. The tools that you currently use to manage the software and hardware outside the cloud aren’t always the best tools to efficiently grow into the cloud. All of the major configuration management tools have cloud orchestration plugins that can be leveraged, but there are also cloud-native tools that can dramatically improve the efficiency of managing your application lifecycle. In his session at 18th Cloud Expo, ...
It’s 2016: buildings are smart, connected and the IoT is fundamentally altering how control and operating systems work and speak to each other. Platforms across the enterprise are networked via inexpensive sensors to collect massive amounts of data for analytics, information management, and insights that can be used to continuously improve operations. In his session at @ThingsExpo, Brian Chemel, Co-Founder and CTO of Digital Lumens, will explore: The benefits sensor-networked systems bring to ...
When building large, cloud-based applications that operate at a high scale, it’s important to maintain a high availability and resilience to failures. In order to do that, you must be tolerant of failures, even in light of failures in other areas of your application. “Fly two mistakes high” is an old adage in the radio control airplane hobby. It means, fly high enough so that if you make a mistake, you can continue flying with room to still make mistakes. In his session at 18th Cloud Expo, Lee...
Large scale deployments present unique planning challenges, system commissioning hurdles between IT and OT and demand careful system hand-off orchestration. In his session at @ThingsExpo, Jeff Smith, Senior Director and a founding member of Incenergy, will discuss some of the key tactics to ensure delivery success based on his experience of the last two years deploying Industrial IoT systems across four continents.
Much of IT terminology is often misused and misapplied. Modernization and transformation are two such terms. They are often used interchangeably even though they mean different things and have very different connotations. Indeed, it is somewhat safe to assume that in IT any transformative effort is likely to also have a modernizing effect, and thus, we can see these as levels of improvement efforts. However, many businesses are being led to believe if they don’t transform now they risk becoming ...
SYS-CON Events announced today the Enterprise IoT Bootcamp, being held November 1-2, 2016, in conjunction with 19th Cloud Expo | @ThingsExpo at the Santa Clara Convention Center in Santa Clara, CA. Combined with real-world scenarios and use cases, the Enterprise IoT Bootcamp is not just based on presentations but with hands-on demos and detailed walkthroughs. We will introduce you to a variety of real world use cases prototyped using Arduino, Raspberry Pi, BeagleBone, Spark, and Intel Edison. Y...
Identity is in everything and customers are looking to their providers to ensure the security of their identities, transactions and data. With the increased reliance on cloud-based services, service providers must build security and trust into their offerings, adding value to customers and improving the user experience. Making identity, security and privacy easy for customers provides a unique advantage over the competition.